Up to 2008

Tata Consultancy Services: Excellent performance High returns on investments Big chunks of investments held by Fund Management Companies

2009
On April 20th 2009 TCS declared bonus issue 1:1 Global Economic Crisis brought slowdown in the Indian IT Sector

Indian IT Companies had a majority of their client base in BFSI

World Bank, IDC,NASSCOMM reports Forecasted tough times or IT industry

ahead.

 TCS had weathered the worst business environment But, market did not anticipate a bonus issue Bonus Issue at a critical time

Scepticism: Whether TCS will be able to serve its expanded capital after

bonus issue
Modification of dividend policy

Date
April 20

Indicator
Before Announcement

TCS Stock price

560.4

Volume (Lakh)
2.7

April 20

After Announcement

599.7-557.1

4.5

April 21

Closing Price

551.7

10

April 22

Closing Price

543

3.5

April 23

Closing Price

568

3.5

Established in 1968 as a Division to service their electronic data processing

(EDP) requirements and provide management consulting services

Leading information technology companies in the world. Workforce of over 74,000 professionals spread across more than 50 global delivery centres

Helps organizations stay ahead with new technology It is the world's first organization to achieve an enterprise-wide Maturity

Level 5 on quality improvement models

Significant presence in China, South Africa, United Arab Emirates and Eastern Europe

On 25th August 2004, TCS was listed.

IPO priced at Rs. 850 for a share of Re. 1 Face value. The stock was listed at BSE at Rs. 1,050 Touched a high of Rs. 1,080 and closed for the day at Rs. 987.50 (No Circuit on the listing Day)

FY05-06:- Growth of 36% in revenues and 51% growth in PAT April 17:- Declared Bonus Issue April 17:- Stock price of TCS grew by 5.9% to Rs. 1904 on April 18:- Stock grew by 5.7% to Rs. 2013

April 18:- Touched an intra-day high of Rs. 2099

July 31 :- Record date for bonus issue was set as July 27 :- Stock closed on Rs. 1893 July 28 :- Ex-bonus price was Rs. 948, slightly more than half of the last closing price (Rs. 1,893) as the bonus issue ratio was 1:1; July 28:- Finally closed at Rs. 931, before reaching infra day high of Rs. 950.

Sales cycles elongated from 3-9 months due to Slowdown

Revenue gains likely to slip into next year 43% of western companies cut IT spends Renegotiate rates and prices Slowing U.S. economy
70% of firms negotiating lower rates 60% cutting back on contractors Only 40% of companies plan to increase their use of offshore vendors

Only 40% of companies to increase use of offshore vendors. M&A activity postponing large outsourcing contracts for 6-9 Months

Operational profit % YoY Increase Revenue by Geo. America

2006 53

2007 45

2008 20

2009 4

% of total (2008) 51.38

% of total (2007) 50.35

US
Revenue by Indus. BFSI Dividend Payout Ratio

18.99
% of total (2008) 43.32 2006 .4 2007 .38

19.91
% of total (2007) 44.45 2008 .35 2009 .25

It bridges the gap between capital and fixed assets

Creates confidence for the investors / shareholders in the company Good market reputation Increases Liquidity of Shares